Month: April 2013

Internal Revenue Code section 280E, denying deductions for marijuana businesses other than cost of goods sold, is working. Not only does it pinch businesses, it does so in a fortuitous way.

Section 280E is arguably working better than a flat, untargeted excise tax like our taxes on alcohol and tobacco: The public has an interest in not promoting marijuana consumption, and section 280E it makes all advertising and marketing expenses Continue reading 280E Is Working: Brookings

To control and derive revenue from recreational substances, the public faces a choice. For liquor, some 17 states choose monopoly over taxed, regulated private sales. It’s awfully hard to switch from private sales to monopoly, but a House Bill 782 in North Carolina would do just that for fortified malt beverages and fortified wine Continue reading Sin Tax-and-Regulate or State Monopoly? NC bill would tighten.

I have often deplored the failure to index weight- and potency-based excise taxes on alcohol, tobacco, and marijuana, so it’s heartening to see the Obama budget call for indexing of tobacco tax rates (as well as an increase). There’s more of the same in the budget’s call for indexing of tax penalties. I have high hopes.

A U.K. based religious organization is weighing in on the problem of multinational corporations avoiding hundreds of billions in tax by shifting income to affiliates who don’t pay taxes. Bravo. Make that “Amen.” As the French would say, “Qu’on se le dise” — Let us tell ourselves: Spread the word. The international tax systems is broken beyond repair, if only because very few citizens understand it. As Bob Dole once said, “Where’s the outrage?” Well, maybe the outrage is on its way.

[Note: This was the April Fool’s Day entry:] Since we use the Tax Code to encourage this (home ownership) and discourage that (tobacco), what if polygamy returns to legality in some state? We have struggled enough with simple, two-person marriage, where we sometimes impose a marriage penalty. Continue reading Taxing Polygamy